Battle to use the term ‘ugg boots’ continues in US court

Ugg boots have been described as being just as Australian as Champagne is French.

Now the future of the coveted sheepskin boot trademark is up in the air as a US footwear company that has long fought Australian manufacturers for the right to sell their shoes as “uggs” around the globe has come under pressure from its own investors to sell itself.

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Australian bootmaker in ugg-ly legal battle

A US footwear company is seeking to prevent Sydney-based Australian Leather from selling ‘ugg boots’ around the world.

Australians may be familiar with the California-based Deckers Outdoor Corporation, both for its brand UGG (formerly UGG Australia) and for its David and Goliath legal battles against small Australian sheepskin boot makers.

Eddie Oygur is the founder and owner of Australian Leather Pty Ltd, which has been manufacturing ugg boots since the early 1990s, using Australian sheepskins to make about 50,000 pairs of the boots every year.

“I want to take this right to the end:” Australian Leather owner Eddie Oygur, who is fighting for the right to use the term ‘ugg boots.’ Photo: James Alcock

Last year Deckers, which has an annual turnover of $2.4 billion, instituted legal proceedings against the Sydney small business, in what was its latest attempt to trademark the word “ugg” around the world.

The court action called for multi-million dollar punitive damages and for all of Australian Leather’s ugg boot stock to be delivered to Deckers in the US for destruction, among its sweeping orders.

Mr Oygur responded to the action by counter-suing Deckers, claiming that their trademark of “ugg” was based on a falsehood.

He approached the Australian Competition and Consumer Commission last year, alleging Deckers made false and misleading representations by using the former brand name UGG Australia, when their products were made in China.

However after learning that Deckers was rebranding from ‘UGG Australia’ to ‘UGG,’ the ACCC decided not to take further action.

“This is a company importing the name of “ugg” into Australia, undercutting all the manufacturers…we can’t compete,” said Mr Oygur, who last week returned from Los Angeles where he gave a deposition for the upcoming hearing.

Senator Xenophon in his Australian sheepskin boots. Photo: James Alcock

“[In LA] they attempted to mediate and wanted me to commit to selling only in Australia and New Zealand, but I said that was unacceptable…I want to take this right to the end, even if it means selling my property, getting an overdraft, I’m willing to do that.”

In a statement to Fairfax Media, Deckers said the lawsuit pertained to “Australian Leather’s infringement of our registered trademarks and design patents in the United States.”

“Deckers is confident in its position and looks forward to presenting its case in court.”

South Australian Independent Senator Nick Xenophon has previously compared the fight to protect the word “ugg” to “the French protecting champagne, the Portuguese protecting port, the Spanish protecting sherry and even the Greek protecting fetta”.

Competition and consumer lawyer Michael Terceiro said Mr Oygur’s case was built on proving that other manufacturers had sold “ugg” boots in the US prior to 1985, when Australian entrepreneur Brian Smith registered a trademark over the brand that he later sold to Deckers.

Mr Terceiro has gathered depositions from about eight witnesses who had been “selling ‘ugg’ boots in the US as early as the late 60s.”

When he arrived in the US last week, Mr Oygur was not aware that Deckers was considering a sale of the company, but he has since said he believes it points to why the company was seeking mediation.

“… Because they wanted to sell the company. Otherwise I don’t think they would have mediated. Who wants to buy a company undergoing litigation?”

While sales of Deckers’ UGG boots exploded to $1.52 billion in 2016, from just $37 million in 2003, growth has slowed, with Decker’s share price losing more than one-third of its value since the end of 2014.

Last week Deckers announced it would undertake a review process including “an exploration and evaluation of strategic alternatives to enhance stockholder value, which may include a sale or other transaction”.